Existing law imposes an excise tax on the purchase or possession of cigarettes at the rate of $1.80 cents per pack of 20 cigarettes. (NRS 370.165) Existing law also imposes an excise tax on the receipt, purchase or sale of other tobacco products, other than cigarettes, in this State. (NRS 370.450) For the purposes of such taxes, a cigarette is defined as rolled tobacco, or tobacco substitute, that is wrapped in paper or a substitute for paper that is not tobacco. (NRS 370.010) Section 4 of this bill decreases the excise tax on cigarettes to $0.90 cents per pack of 20 cigarettes if: (1) the cigarettes are intended to be heated but not burned under ordinary conditions of use; (2) the United States Food and Drug Administration has approved the product to be commercially marketed and distributed in interstate commerce as a modified risk tobacco product; and (3) the most recent postmarket surveillance and study conducted for the product in accordance with federal law indicates that less than 5 percent of persons under the age of 18 years have used the product. Section 1 of this bill provides that tobacco that is rolled in paper and intended to be heated but not burned under ordinary conditions of use is considered a cigarette for the purposes of licensing and taxation in this State. Section 3 of this bill provides that such a cigarette, and any device used to heat the tobacco in the cigarette is not a vapor product for the purposes of licensing and taxation because such a product is licensed and taxed as a cigarette. Existing federal regulations, with certain exceptions, require the sale of cigarettes and smokeless tobacco to occur only in a direct, face-to-face exchange without the assistance of any electronic or mechanical device, including, without limitation, a vending machine. One exception to this requirement authorizes the use of a vending machine or self-service display to sell cigarettes or smokeless tobacco if the vending machine or self-service display is located in a facility where the retailer ensures that no person younger than 21 years of age is present, or permitted to enter, at any time. (21 C.F.R. § 1140.16) Existing state law also prohibits a retailer from selling cigarettes through the use of any type of display which is located in any area to which customers are allowed access and from which cigarettes are readily accessible to a customer without the assistance of the retailer. (NRS 202.2493) As an exception to this requirement, existing state law authorizes the sale of cigarettes through a cigarette vending machine placed in certain areas in which persons who are under 21 years of age are prohibited from loitering. (NRS 202.2494) Existing law also provides for the licensing of operators of cigarette vending machines and the payment of the excise tax on cigarettes by the operators of cigarette vending machines. (NRS 370.270, 370.310, 370.380, 370.567, 370.575, 370.585) Section 9 of this bill prohibits the sale through a cigarette vending machine of cigarettes that are intended to be heated but not burned under ordinary conditions of use, and sections 2 and 5-7 of this bill make conforming changes to reflect that such types of cigarettes are prohibited from being sold through cigarette vending machines. Under existing law, a fine of not more than $500 applies to the unlawful sale of cigarettes through a cigarette vending machine. (NRS 202.2493)

Statutes affected:
As Introduced: 370.010, 370.015, 370.054, 370.165, 370.270, 370.380, 370.585, 202.2485, 202.2494
BDR: 370.010, 370.015, 370.054, 370.165, 370.270, 370.380, 370.585, 202.2485, 202.2494